TMI Blog1995 (12) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ntees or letters of undertaking to the Director General of Foreign Trade to secure the excise duty in case of non-fulfilment of stipulated export obligation. The consignments were received and allegedly upon verification thereof by the proper officer an order for release of goods was passed in terms of Section 47 of the said Act whereafter they were allegedly temporarily kept with the Clearing Agent. On 22-4-1995 the petitioners imported Mulbery raw silk which [was] also released upon compliance of all formalities in terms of Sec. 47 of the said Act. Similarly another consignment was exported (sic) by them on 28-6-1995. The petitioners contend that owing to some administrative problem a lock-out was declared in the Mill and Factory belonging to the petitioner and they could not take delivery of the goods from the Clearing Agents whereafter they took on rent a godown on 24-7-1995 at a fixed rental of Rs. 35,000/- per month. The goods in question were shifted in the said godown, on 13th and 14th August 1995 whereafter Officer In-charge of Titagar Police Station put the godown under lock and key. Allegedly the petitioners supplied xerox copies of all the relevant documents but in spit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have filed various writ applications in this court questioning summons issued to the petitioner and for release of the seized goods despite the fact that they were to appear 3 days in a week in terms of an order passed by this court while granting anticipatory bail to the petitioner No. 2. The respondents have denied and disputed that at any point of time any original documents was produced or shown to the concerned officers and only pursuant to the order of this court dated 30-11-1995, the petitioners filed 3 original import licences, 3 corresponding DEEC books and 2 original triplicate copies of bills of entries bearing No. 69, 6 and 1 and xerox copy of triplicate bill of entry bearing No. 136 and on 16-11-1995 pursuant to the said order the petitioner No. 2 appeared and stated that he had nothing further to say nor any further submission was made. The respondents contend that the goods detained/seized are not the same goods which were imported and the petitioners are guilty of suppression of materials documents and have also taken recourse to manufacture thereof. 6.It may be recorded that pursuant to the aforementioned order dated 13-11-1995 a report has also been submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed licences therefor. According to the learned Counsel the Central Government even in relation to one licence has exempted the petitioner from payment of excise duty and in other cases allowed it to furnish bank guarantees which, the learned Counsel would contend, goes to show the fact that the petitioner No. 1 is a reputed concern. It was submitted that in view of the fact that the imported goods were released upon compliance of all the formalities as required under Section 47 of the Customs Act, the respondents could not have seized the same. It was contended that in the instant case there is no charge of smuggling, the purported seizure by the Customs authorities in purported exercise of the jurisdiction under Section 110(1) of the Act without taking recourse to the provision of Section 129(D) is wholly illegal and without jurisdiction. In support of his aforementioned contentions reliance has been placed on Jain Shudh Vanaspati Ltd. Anr. v. Union of India Ors. reported in 1982 (10) E.L.T. 43, Union of India Ors. v. Jain Shudh Vanaspati reported in 1993 (64) E.L.T. 3 (SC) = AIR 1992 SC 572, Rotoflex Industries v. Collector of Customs reported in 1992 (60) E.L.T. 379, and U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ekar Patil v. Dr. Mahesh Madhav Gosavi Ors. reported in AIR 1987 SC 294, Pritam Singh v. Ranjit Singh reported in AIR 1972 Rajasthan 59, A.K.K. Nambiar v. Union of India Anr. reported in AIR 1970 SC 652 and Narmada Charan Banerji v. Maharaj Bahadur Singh Dugar reported in ILF 1937 (II) Calcutta, 259. 10.It has, further been submitted that no reason to believe for such has been stated in the seizure list. 11.Mr. Bajoria, the learned Counsel, appearing on behalf of the respondents, however, submitted that there is nothing to establish that the detained/seized goods are those in respect of which the petitioners have annexed xerox copies of import licences, bills of entry with the writ application. According to the learned counsel documents which have been annexed to the writ application had never been submitted before the Customs Authority and they have obstructed the investigation as also are avoiding examination and manipulating documents. 12.The learned counsel has produced before me two notifications to show that the said Officer has the requisite jurisdiction. 13. It was submitted that at the investigation stage no order for the release of the goods should be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.In view of the stand taken by the Respondents that there exists reasonable apprehension that the goods which are seized/detained are not the same which had been imported by the petitioners, it might not have been necessary for this court to consider the effect of Section 47 vis-a-vis Section 129D of the Customs Act. However, in fairness to the learned Counsel the said question may be considered. Section 47 of the Act provides for clearance of goods for home consumption empowering the proper officer to make an order permitting clearing of the goods when he is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under the said Act in respect of the same have been paid. It may be true that an order under Section 47 is passed by a proper officer but that does that mean that in no circumstances such goods cannot be seized. Section 110 of the Act empowers the authorities to seize goods in the event the proper officer has reasons to believe that any goods are liable to confiscation under the said Act. Proviso appended thereto deals to confiscation under the said Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act had done so after physical verification of the goods and yet a certain proceedings to confiscate the goods had been started. In the case before the Delhi High Court notices under Section 28 and 124 of the Act had been issued and they were under challenge, which shows that proceeding `or confiscation had already been initiated and along with the proceeding `of confiscation, notice for payment of duty short levied had also been issued. The Division Bench of Madras High Court also noticed a full bench decision of this Court in Eureshian Equipment and Chemical v. Collector of Customs reported in 1980 (6) E.L.T. 38 (Cal.) = AIR 1980 Calcutta, page 188 and followed the same. The Division Bench held :- "Both the Bombay Court judgement in the case of Union of India v. Popular Dyechem [1987 (28) E.L.T. 63] and the Delhi Court judgment in the case of Jain Sudh Vanaspati Ltd. and Others v. Union of India and Others [1982 (10) E.L.T. 43], on their peculiar facts, are good for taking notice of the order under Section 47 of the Act and saying accordingly that unless that order was set aside, no proceeding for confiscation should have been taken. It is difficult, however, to accept this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out a valid licence, they should not be heard to say that because of the order under Section 47, steps cannot be taken against them under the other provisions of the Customs Act. This contention of counsel for the appellants, is, therefore, overruled." 25.In M/s. Euresian Equipments Chemicals Ltd. Ors. v. The Collector of Customs Ors. reported in 1980 (6) E.L.T. 38 (Cal.) AIR 1980 Calcutta, page 188, it was held : "An order by the proper officer permitting clearance and loading of the goods under Section 51 of the Customs Act does not affect the position, Under Section 113 of the Customs Act export goods incur the liability to confiscation at the stage when they are attempted to be exported. The attempt to export necessarily precedes actual export. At the time of attempting to export the goods contrary to prohibition, the liability of the goods to confiscation arises and at that point of time, when the liability to confiscation arises, the goods are `goods which are to be taken out of India to a place outside India' and are, undoubtedly, `export goods' within the meaning thereof as defined in Section 2(19) of the Act. Actual export of the goods, as a result of the attemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of on 23-11-1995. It appears that Ruma Pal, J. in Bengal Tools Limited v. Additional D.G.P.I. reported in 1995 (77) E.L.T. page 858 and Christal Implex Pvt. Ltd. v. Collector of Customs (Preventive), Calcutta, reported in 1994 (70) E.L.T. 198 at page 22 has taken the same view. Furthermore the adjudication is yet to take place as to whether the goods in question are the same which are said to be imported and covered by the bills of entries annexed to the writ application. 30.So far as the submission of the learned Counsel to the effect that the Department of the Customs, Preventive Unit, has no jurisdiction, suffice it to say that the Central Government had issued two notifications bearing No. 250/83, dated 27-8-1983 which has been amended by various notifications in terms whereof Collector of Customs (Preventive), West Bengal has the jurisdiction over the whole of the State of West Bengal, the State of Sikkim and the Union of Territory of Andaman and Niccobar Island. In terms of another notification bearing No. 251/83-Cus., dated 27-8-1983 as amended by various other notifications, the area of Port of Calcutta, Dum Dum Airport, under the jurisdiction of Calcutta, Howrah and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A of the Central Excises and Salt Act the court considered the relevant provisions which are in pari materia with the provisions of the said Act and inter alia held that such notifications are intra vires. Such powers can be conferred under the Customs Act upon various authorities as would be evident from Sections 2(8), 3, 5 and 6 of the said Act. The Central Government for administrative convenience may delegate different powers with different officers over different areas dividing the country into various administrative zones and also may place certain types of cases under a particular officer. 33.In Crystal Impex Pvt. Ltd. v. Collector of Customs, Calcutta reported in 1994 (70) E.L.T., page 198 Suhash Chandra Sen, J. (as his lordship then was) held that Customs Officers in Calcutta and Bombay are officers of the same Department and if any detention of goods has to be done at Bombay for the purpose of investigation in Calcutta, the Customs Officer of Bombay can do so in exercise of their statutory authority under the Customs Act. 34.In any event the question as to whether the authority has the territorial jurisdiction to effect search and seizure is essentially a questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d : "The High Court was not justified in quashing the show cause notice. When a show cause notice is issued to a Govt. servant under a statutory provision calling upon him to show cause, ordinarily the Govt. servant must place his case before the authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. The purpose of issuing show cause notice is to afford opportunity of hearing to the Govt. servant and once cause is shown it is open to the Govt. to consider the matter in the light of the facts and submissions placed by the Govt. servant and only thereafter a final decision in the matter could be taken. Interference by the Court before that stage would be premature. The High Court in our opinion ought not to have interfered with the show cause notice." 37.For the aforementioned reasons I am of the opinion that the submission rendered on behalf of the petitioner that the seizure has been effected by the Superintendent of Customs of Barasat without having any jurisdiction in the matter can be allowed to be raised in this writ application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s effect has been declared in no ambiguous terms in Pukhraj v. D.R. Kohli, AIR 1962 SC 1559. This Court has administered caution to the courts not to sit in appeal in regard to this question and has observed that if prima facie there are grounds to justify the belief the courts have to accept the officer's belief regardless of the fact where the court of its own might or might not have entertained the same belief. The law declared by this Court is binding on the High Court and it was not open to the High Court to do exactly what it was cautioned against by this Court. Section 123 of the Act does not admit of any other construction. Whether or not the officer concerned had entertained reasonable belief under the circumstances is not a matter which can be placed under legal microscope, with an over-indulgent eye which sees no evil anywhere within the range of its eyesight. The circumstances have to be viewed from the experienced eye of the officer who is well equipped to interpret the suspicious circumstances and to form a reasonable belief in the light of the said circumstances." 41.The Supreme Court noted that its decision in D.R. Kohli (supra) has been followed in the case of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be formed. It is true that it is not necessary for the Customs authorities to state reasons for his belief but if it is challenged that he had no reason to believe for such seizure, he must disclose the materials upon which his belief was formed. As has been held in Somnath Singh's case reported in AIR 1971 SC 2451, the court can examine the materials to find out whether [an] honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the Court. 46. In Gopikishan Agarwal's case reported in 1983 (13) E.L.T. 1434 (SC) = AIR 1967 SC 1298 the Apex Court repelled the contention that Section 105 of the Act confers unbridled and arbitrary power on the Assistant Collector of Customs to make a search, only condition being that he has reasons to believe in the existence of the facts mentioned therein. The Supreme Court noticed that the object of the Section is to make a search for the goods liable to be confiscated. It further noticed that the legislative policy recorded in the Section is that search must be with regard to 2 categories mentioned therein. 47. The Supreme Court further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 19(D) of the Foreign Exchange Regulation Act, 1947, the identity of the informer need not be disclosed. 51.The starting point of a search is Section 105 of the Customs Act and it is completed under Section 110. In the instant case the respondents in their affidavit-in-opposition have disclosed the reasons. 52.The respondents, thus have a right, nay a duty to unearth such racket, if any, and if in this process they have seized the goods in question and [have] found out the illegal motive on the part of the petitioners to be in possession of foreign made goods, in my opinion, no illegality can be said to have been committed. Such illegal possession, according to the respondents, attracts the provision of confiscation under the Customs Act. 53. In this case the Court is not concerned with the fact as to whether in fact any confiscation shall be effected or not. The petitioner may be able to show that they had not violated any of the provisions of the Act and the goods were thus not liable for confiscation. 54.The only question which arises for consideration at this juncture is as to whether there has been reasons to believe that such goods, if seized, would [be] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Until the culmination of the adjudication it is difficult to envisage any right on the part of the respondents from whom they are seized to export them on the basis of a future title they expect to acquire by payment of fine. Learned counsel, however, says that it would earn foreign exchange for the country. But sanctity of legal proceedings cannot be whittled down on grounds of such expediency." 61. It may be that ultimately the petitioner may succeed upon investigation of facts that the petitioners are genuine exporters and the goods imported by them were meant for export to the contracting parties to the petitioner in terms of the licences granted to it. In view of the aforementioned authoritative pronouncements of the Supreme Court, in my opinion, the goods cannot be released at this stage. Re : Question : D 62.The submission of Mr. Panja to the effect that the respondents have failed to discharge their burden cannot be allowed to be raised at this stage. This court cannot go into the merit of the matter at this stage. The jurisdiction of this court is limited. The Court could direct release of the goods and stop the investigation and other adjudication proceedings only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available to the Department and if necessary to cross-examine the witnesses on whose statements the Department is relying. In these circumstances we decline to exercise our writ jurisdiction and examine whether the show cause notice should be struck down. It is now well settled that issuance of show cause notice can be quashed only on the ground that it was wholly without jurisdiction or it was issued without any material whatsoever available with the Department." 65. In Crystal Impex Pvt. Ltd. v. Collector of Cus. (Preventive) Calcutta reported in 1994 (70) E.L.T. 198 (Cal.), Suhas Chandra Sen, J. as his Lordship then was, upon taking into consideration a large number of decisions held that in view of the affidavit-in-opposition filed by the Customs Department [they] have been able to make out a prima facie case which calls for an answer, therefore, the writ petition fails. 66. In I.J. Rao, Asstt. Collr. of Customs v. Bibhuti Bhushan Bagh reported in 1989 (42) E.L.T. 338 (S.C.) the Supreme Court held that the concerned persons are not only entitled to information as to the investigation which is in process because there can be no right in any person to be informe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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